Shinhan Bank President Cho Yong-byeong took over from former President Suh Jin-won barely three months ago, as the latter resigned from the top position in the bank due to sudden illness.
Cho has been praised for his management of the bank from both those in and outside the bank in such areas as asset soundness and keeping profit levels. However, he has yet to score any major victories when it comes to finding new business areas.
The heads of commercial banks have been tested for their ability to manage risk in the first half of the year, with both housing and corporate loans rising, forcing them to be alert to protect the loans from defaults.
Cho is considered to have been on average as far as making profit is concerned, with the NIM in the second quarter expected to fall below that of the first quarter. Shinhan Bank is not expected fall farther than other rival banks.
The NIM in the second quarter fell to 1.54 percent from 1.58 percent in the preceding quarter, while that for Kookmin Bank fell to 1.6 percent in Q2 from 1.72 percent in Q1, and Woori Bank’s NIM is expected to fall to 1.4 percent in Q2 from 1.45 percent in Q1.
The bank’s profitability is a little lower than that of Kookmin Bank, which is competing to be the top bank in the country, but the fall in the NIM for Shinhan is be the smallest among the major banks.
President Cho has also been applauded for keeping the bank’s assets sound, among the financial critics with its default rate in April rising to 0.52 percent from 0.36 percent in March, and 0.56 percent in May; that’s not bad compared to rival banks, with those for both Woori and Kookmin banks coming in at 0.2 percent to 0.4 percent higher than Shinhan Bank’s in May.
However, there have been some negative areas under his management. President Cho has been considered to have not done well when it comes to finding new growth engines. One representative project was a bid for the Nara Sarang Card last month by the Military Financial Cooperative, which went to Kookmin Bank and the Industrial Bank of Korea (IBK).
It is a kind of a check card for combining pay books and retirement certificates for military personnel, which does not generate much profit, but the potential membership would reach around 350,000. Competition among the banks was very intense for that reason.
Another dismal area for the bank under Cho has been moves surrounding Fintech. The bank has so far set up the WISH brand as a Fintech product, but Woori Bank beat it to the punch by setting up the Wibi Bank, the first Internet bank in the country.
Officials of the bank were reluctant to set up Fintech financial products even before the government came up with detailed regulations for the new financial area. But they said they have been doing their best to introduce a number of mobile loan products.
Cho has done well in overseas operations, with the takeover of a local Indonesian bank getting approval from the local financial authorities there. The bank is well on its way to setting up branches in foreign countries, including Vietnam.
